Attorney General Raúl Labrador announced that Tracy Hofius, 49, was sentenced on January 21, 2026, for Public Assistance Provider Fraud stemming from her time as Executive Director of the North Star Child Development Center, a non-profit serving Idaho Medicaid participants with developmental disabilities.
Public Assistance Provider Fraud is a felony that carries a potential sentence of up to 15 years in prison. At the time of Hofius’ fraudulent activity in 2022 and 2023, the penalty was five years. Hofius pled guilty to the charges on November 18, 2025.
Investigators determined that Hofius submitted false and inflated claims to the Idaho Department of Health and Welfare for Medicaid reimbursement, billing for services that were never provided. The fraudulent scheme resulted in $154,119 in improper payments.
“When the Legislature gives my office authority to investigate fraud, we get results,” said Attorney General Labrador. “This defendant stole $154,000 by billing for services never provided to children with disabilities. We recovered every dollar and will continue pursuing anyone who defrauds Idaho’s Medicaid program.”
Kootenai County Judge Barry McHugh sentenced Hofius to three years of supervised probation, ordered full restitution to Idaho Medicaid, and imposed a $1,000 fine and court costs. Hofius was also required to perform 45 days of labor with the Kootenai County Sheriff’s Community Labor Program and complete 120 hours of community service. In addition, her guilty plea allows the Federal Department of Health and Human Services to suspend her credentials as a Medicaid provider.
The case was investigated and prosecuted by the Attorney General’s Medicaid Fraud Control Unit, which is funded 75 percent by the U.S. Department of Health and Human Services and 25 percent by the State of Idaho. For Fiscal Year 2026, the unit’s federal funding totals $1,105,525, with $368,508.33 coming from state funds.
Officials emphasized that the conviction underscores Idaho’s commitment to protecting Medicaid funds and holding providers accountable for fraudulent activity, particularly when it involves vulnerable populations such as children with disabilities.